[Satellite News 08-16-11] After struggling to capitalize early on its new broadband services, satellite operator Thaicom is finally reporting healthy revenue contributions from its Ipstar offering, which could help the operator post net profits by the end of the year.

   According to a number of analysts who cover Thaicom stock, the operator has performed well above expectations in recent months and has seen noticeable improvements in selling its services to the Asian markets. In its 2011 fiscal second quarter this year, Thaicom generated $28.32 million in Ipstar service revenues, which represents an increase of more than 35 percent compared with the same period last year.

   Bualang Securities Satellite Equity Analyst Prasit Suijiravorakul said that the operator’s Ipstar revenues were “surprisingly high” during the quarter and that Thaicom could soon post its first net profit in three years. “We expect another net loss in the 2011 third quarter followed by a net profit in the 2011 fourth quarter, bolstered by revenues kicking in from the Australian government’s National Broadband Network (NBN) and its business with Measat,” Suijiravorakul said in an Aug. 16 research note.

   Suijiravorakul also highlighted that Ipstar’s improved results puts Thaicom on track to break even in the fourth quarter of this year. “Ipstar reported its first gross profit [of $2.86 million] since the third quarter in 2004 on increased bandwidth and UT sales to India, Japan, Australia and New Zealand. The conventional satellite business improved both year-on-year and quarter-on-quarter. Its gross profit rose 49 percent year-on-year and 16 percent quarter-on-quarter thanks to the higher bandwidth sales to TV operators and lower transponder rental costs. The Internet unit’s gross profit rose by 314 percent year-on-year and 12 percent quarter-on-quarter on higher DTV dish sales in Cambodia.”

   IV Global Securities Satellite Analyst Rattana Leenuthaphong agreed with Suijiravorakul’s assessment and hailed the results as “better than expected” despite Thaicom posting a net loss of $821.2 million in the second quarter this year. “The 2011 second quarter results imply a possibility of breaking even in the fourth quarter. As Thaicom may turn an operating profit faster than we previously thought, we therefore revise up our earnings in 2011 from a previous loss estimate of $5.78 million to a revised loss of $4.47 million,” Leenuthaphong said in a report issued Aug. 16.

   Thaicom’s recent executive management shift may continue to provide a dynamic boost for the operator. In July, Thaicom appointed Suphajee Suthumpun as its new CEO to replace Arak Chonlatanon who had served in the role for the past two years. Suthumpun, who previously served as managing director of IBM Thailand Co., started her new role at the beginning of August, and appears to be joining at a time when the operator is on an upswing.

   The operator also recently announced details of its new Thaicom 6 satellite. The spacecraft will be equipped with a total of 26 transponders — 18 in C-band and eight in Ku-band — and will require an investment of approximately $160 million. The satellite is expected to launch in just under two years time.

Suijiravorakul maintained his firm’s 2011 profit forecast for Thaicom, but upgraded the operator’s forecasts for 2012 by 120 percent. “We also are upgrading our full-year 13 number by 46 percent in order to reflect expanded expectations for Ipstar bandwidth utilization, which increased 5 percent to 37 percent for the 2012 full-year.